Portugal and the EU on a Collision Course

Opposition to the Tobacco Directive Gains Allies

By Cláudia Nunes, in Opinion, Europe · 16 Aug 2025, 09:01 · 0 Comments

Credits: envato elements; Author: MikeShots;

In a rare move, Portugal has publicly challenged the European Commission, voicing reservations over the proposed revision of the Tobacco Excise Directive (TED). Lisbon’s position, expressed by the Ministry of Finance, warns of the risks of increased illicit trade, annual revenue losses of up to €1.5 billion, and the erosion of Member States’ fiscal autonomy. Alongside countries such as Greece, Romania, Sweden and Bulgaria, Portugal is now at the heart of a growing resistance to a measure that, under the guise of public health, threatens to centralise fiscal power in Brussels, disregarding the economic, cultural and social particularities of EU Member States.

The TED proposal seeks to harmonise tobacco product taxation, equating traditional cigarettes with reduced-risk alternatives such as vapes, nicotine pouches and heated tobacco. These alternatives, adopted by millions of Europeans as tools to quit smoking, have a significantly lower impact on public health, as confirmed by scientific studies, including from the JAMA Network, which shows that vaping can be an effective cessation tool by reducing exposure to harmful compounds generated by cigarette combustion.

Nevertheless, the Commission insists on taxing them as if they were equivalent to combustible cigarettes, ignoring evidence and penalising those who seek less harmful options. Worse still, it proposes drastic tax hikes of up to 790% on nicotine pouches, including Sweden’s white snus, with the explicit aim of raising revenue for the EU budget at the expense of national treasuries.

The Portuguese government issued a sharply worded statement expressing concern that these new rules would not only undermine public health by discouraging the switch to less harmful products, but also fuel the illicit market. This is a well-founded worry given that experience in countries such as France and Italy shows that abrupt increases in tobacco taxes have led to a rise in smuggling, with illegal networks operating entirely outside sanitary or fiscal control.

Equally impossible to ignore is the underlying attempt at fiscal harmonisation. The move to create a European tax under the guise of public health would divert revenue from national coffers. In Portugal’s case, up to €1.5 billion annually could be lost, and the Ministry of Finance was unequivocal in stating that under such conditions, the TED is simply unacceptable.

Portugal thus joins other countries that have already voiced their concerns, each from within its own reality. Sweden, for instance, leads Europe in tobacco harm reduction with its model based on snus and other alternatives that have driven cigarette consumption to historic lows. Becoming “smoke-free” is an entirely achievable goal for Swedes without any external intervention, but the TED threatens to jeopardise that progress by imposing disproportionate taxes.

Greece and Bulgaria focus on the economic impact, as both have significant numbers of jobs and agricultural and industrial sectors linked to tobacco that sustain local communities. Romania, sharing similar concerns to Portugal, warns of the budgetary consequences and the destabilisation of the internal market.

These objections, distinct yet complementary, converge on a central point: the revision of the TED ignores national realities, tramples on countries’ sovereignty and imposes a dangerous solution that fails to achieve the objectives it claims to pursue.

If approved, the TED will not be just another directive. It will be a decisive step towards an EU-wide tax base, with implications that go beyond the tobacco sector and open the door to future centralisations.

The TED proposal requires unanimous approval in the EU Council, giving Member States real power to block it. Portugal should seize this opportunity to build alliances with Greece, Romania, Sweden and others, forming a united front to defend fiscal sovereignty and economic coherence. This is a critical moment to show that national interests cannot be subordinated to a centralising logic which, though presented with good intentions, ignores the realities of the 27 Member States.

To amplify this message, it is essential that civil society and policymakers mobilise. Opposition to the TED cannot remain a technical matter; it is a fight for autonomy, for each country’s ability to set its own fiscal and social priorities, and, ironically enough, for public health itself. Portugal must continue to give voice to these concerns, foster the public debate that has so far been absent, and press Brussels to reconsider.

To retreat now would be to yield to a trend that instrumentalises noble causes and threatens the sovereignty of all in future matters. Let this be the beginning of a broader resistance, in which Member States reaffirm their right to decide their own future.